Tories step up pension pledge

The Conservatives last night held out the prospect of restoring the link between pensions and earnings for at least a decade, as the party's policy development programme intensified.

David Willetts, the pensions spokesman, said savings in the social security budget could allow a Tory government to fund their pledge to pensioners beyond their first term if they are returned to power at the next election.

When the policy of restoring the link - broken by Margaret Thatcher 25 years ago - was announced last year, it applied to a single term amid doubts over whether a longer commitment would be affordable.

It would mean a rise of £7 a week for a single person and £11 a week for a married couple by 2009. The result would be the "lifting" of one million people off means-tested benefit and the removal of penalties on those with modest savings.

Critics claim that the steadily rising number of pensioners means restoring the link would leave future governments with an unaffordable pensions liability running into billions.

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Writing in today's Daily Telegraph, Mr Willetts says the Tory party will seek to "silence the sceptics" by detailing how the promise to link increases in the state pension to rises in earnings, instead of just inflation, could apply for a decade or more.

It could become one of the flagship elements of a streamlined election manifesto modelled on the brief document that Margaret Thatcher used to defeat Labour in 1979.

Mr Howard will concentrate on producing a package of tax and spending policies that will seek to exploit signs of voter unhappiness with the number of taxes under Labour.